Lewisham plans council rent and service charge increases
The proposals, which would see the average council rent increase by £5.95 per week from April 2026, were reviewed by the Housing Select Committee last week.
Lewisham council is proposing a rent increase of 4.8% on council rents for the next financial year, in line with government policy.
The 2026/27 council rent increase has been calculated using the government’s new rent formula, which is made up of the CPI (Consumer Price Index) and an extra 1%.
In September 2025, the CPI was 3.8% and when an extra 1% is added, amounts to 4.8% overall.
According to a report which was presented to Lewisham Council’s Housing Select Committee on 14 January 14, the proposed rent increase will be £5.95 per week on average and raise actual rents to £129.91 per week on average.
The report went on to note that the Housing Revenue Account (HRA) faces “significant challenges” in meeting its obligations and the council’s plans for new supply.
This is partly due to recent rent caps and reductions which have “severely” impacted how the council maintains decent homes standards, invests in existing stock, meets building safety and regulatory requirements and its ability to continue building new social homes.
Some tenants may see further increases to their rent under a government policy called rent convergence, which addresses policies which historically allowed some rents to be set at a lower rate.
Convergence will bring these rents back in line with the government’s standard ‘formula rent’.
Properties currently below formula rent would see gradual rental increases, which could be anything between £1 to £3 per week. Once rents reach the standard formula rent levels, the extra increase would stop.
The government is expected to confirm the final rent convergence value before the end of the month.
The report states that service charges, particularly for energy, have dropped below the council's actual costs and they plan to increase them.
Council tenants who live in estates or blocks where there is a communal heating system in place are set to see their service charges increase by £7.57 per week (22.28%). There are around 1,275 tenants who receive this charge.
Housing Select Committee review
Council executives were questioned by the Housing Select Committee at its meeting on 14 January.
Councillor Stephen Penfold, the committee chair, questioned the steep increases in service charges, noting that the service charge for communal heating rose by 39.9% last year.
He added that these rises are not covered by housing cost - as it now called under universal credit (previously housing benefit) - and will place a direct financial burden on residents.
For the remaining tenants whose service charge does not include energy or heating bills, the planned service charge increase is £2.36 weekly (14.14%).
Penfold noted that last year the service charge for these tenants increased by 7.7% so the increase has almost doubled.
He asked: "How have we got in this position?" and whether officers could give assurances that this would not happen again.
Officers attributed these increases to rising fuel costs and the need for full cost recovery.
They stated that they are phasing in the increases over three years, with a cap at £6 per week increase.
Garage rents in Lewisham are proposed to increase by 4.5%, which represents an increase of 94p per week, and would raise the average basic weekly charge from £20.95 to £21.89.
Brenda Dacres, the Lewisham mayor and cabinet will consider the rent increase proposals, as well as feedback from residents and from the committee as part of the overall council budget setting report ,which is due on February 11, 2026.
Reporting by Ruby Gregory, Local Democracy Reporter with additional reporting by Dorothy Stein.
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